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AG News: 10/13/2008

Radio Industry Needs to Stop Defending Itself

One boss, early in my career, showed me the importance of calm under fire: "I don't want you panicking when the transmitter goes down. Use that time to stay calm and analyze the problem." Transmitters were not always as dependable as they are today so I had to exercise that wisdom multiple times.

Today, radio executives need to use that approach as they watch the industry evaporate into a sliver of the revenue generating machine it used to be. Until now, they have not.

I don't know Emmis Chairman/CEO Jeff Smulyan. He seems a likeable guy. His company has earned a reputation as a quality place to work. But, Emmis - through Smulyan - shares the same trouble with all major radio companies; the CEO is adamant this loss of revenue has less to do with how they have steered the ship than it does with the economic downturn.

Radio Ink has an article on Jeff Smulyan's 2nd quarter earnings conference call last Friday. Through it, Mr. Smulyan makes a number of statements that sound like they'd come from a person trying to protect their flank. He is quoted as upping the number of persons listening to radio each week from 235 million to 260 million by referring to 6+ figures, instead of the standard 12+, for total radio audience count. (6+ has limited data today.) He is also now using the economy as a major reason why advertising is off.

Mr. Smulyan does, rightly, point to Emmis Interactive as a bright spot. Seems each major radio group does this for their new interactive divisions. (When do they talk about their programming?)

Then we have CL King & Associates' analyst Jim Boyle also mentioned in the Radio Ink article, with a question; "How bad does it have to get before the leading radio groups try to adapt in a dramatically different way?" That's when Jeff Smulyan comes back with the statement we're hearing other radio CEOs say. "The challenge is not really the content. The challenge is the perception."

The challenge is in getting radio industry CEOs to start admitting this is about content - which require dollars to produce. These CEOs, who are trying to make next quarter seem less worse than last, won't part with money to improve content. They're too busy slashing jobs while claiming better coverage. Having worked directly with David Saperstein in the early days of Metro Networks, I'm very much interested in how Westwood One will explain it delivers better traffic reports by dropping its city-by-city coverage down to 13 hubs.

There's another trade publication that's worthy of your time today, Radio World Online. On a page with a headline reading "Radio Must Focus on Today's Consumers," Dave Wilson brings up some very good points on why radio is flailing. They fall around the topic of degenerating content.

We won't labor over the minutia regarding quality. They are all subjective calls. But to Mr. Smulyan, and other senior execs within the radio industry, understand that radio listeners are not there in the same numbers (in ratio to our population) or in time spent listening that radio once commanded. To rhetorically state radio faces a perception problem infers you believe that radio industry professionals are not smart and can't read the landscape.

Radio listeners in 6 - 34 demos are finding less reason to tune in amid a sea of audio choice, after being "pushed away" from broadcast radio through a multitude of bad decisions we've all discussed many times. Programming, commercials, songs; the quality of each has diminished greatly. To argue against that with any knowledgeable person is a lost cause.

The article I'm waiting to read hasn't been written yet. It's one that says radio has created something truly unique, which incorporates new media as an adjunct to programming and advertising sales. This article is going to talk about youth turning back to the dial because they are finding programming which isn't found on other platforms. It will also speak of advertisers being given verification of campaign performance (not to be confused with Affidavits of Performance).

Emmis CEO Jeff Smulyan may be a likeable guy but, until he loses this concept that radio is functioning properly and it is "perception" and a bad economy which are holding the radio industry down, Jeff Smulyan is panicking instead of staying calm to analyze the problem. He still doesn't know which way to turn for improving the product served to radio listeners and advertisers.

The true problem here is that Jeff Smulyan is not the only radio CEO to be in this position.

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President, Audio Graphics
Ken Dardis
Online Since January 1997

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